Ever heard of NextCapital? You should, because they’re coming to steal your business. The potential benefits and threats of the rise of the robo advisor to traditional financial advice models has been discussed to death. Robo advice, as many readers will know, is a catchall term for the increasing use of technology to deliver low-cost, automated planning that can better capitalize on economies of scale. NextCapital is now bringing robo advice to the 401(k) marketplace.
“NextCapital seeks to disrupt the retirement target-date fund industry by providing automated, personalized retirement advisory services to 401(k) participants—at a cost not much more than target-date funds,” writes Terry Savage in the Chicago Tribune. “They are expected to partner with several major advice providers in 2015. If you see their service arrive inside your 401(k) plan, take advantage of it.”
NextCapital, which launched in February, is the result of the recent combination of BusinessLogic Corporation and the NextCapital Group. The team has devoted more than 10 years building out its “open engine” advice, account aggregation and defined contribution (DC) managed account platform. NextCapital currently services over 50,000 clients and analyzes more than $50 billion in investor assets every day.
The company says it is “uniquely positioned to be a disruptive leader in the emerging $25 trillion digital advice market, with the ability to provide automated personal advice and portfolio management at a cost and scale that was previously impossible—both for the DC and retail investor markets.”
NextCapital was co-founded by John Patterson, Dirk Quayle, Jon Hagen and Rob Foregger. Their founding team has 70 years of combined experience, and responsible for building out one of the first automated DC managed account platforms, one of the first online banks, and the first electronic financial advisor.
They’ve variously held executive leadership and/or founder positions at Business Logic, EverBank, Fidelity and Personal Capital. NextCapital has a team of 25 employees; primarily comprised of software engineers skilled in the deployment of large scale, secure financial applications.
It concludes by noting that they provide solutions directly to retail investors and also work with multiple “world-class financial institutions” including a relationship with Russell Investments to provide a DC advisory solution and, through its LikeAssets branded solution, a relationship with Dow Jones, Inc. to deliver a personal portfolio management dashboard service for the Wall Street Journal, Barron’s, and MarketWatch subscribers.
See Also:
- Goldman Sachs Closes Deal for Retirement Platform NextCapital
- Resources Investment Advisors Partners with NextCapital to Expand Managed Advice Reach
- John Hancock Goes Robo in Run-Up to DOL Deadline
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
